When most couples get into the relationship, they come with assets that are considered separate from the marriage. As the marriage progresses, many people will sell separate homes and buy one together. This becomes a marital asset. Others won’t sell their property, and they’ll both agree that it’s excluded from being jointly owned. They might even sign a prenuptial or postnuptial agreement to that effect.
When the couple has separated but there’s been no divorce, it can lead to some confusion about whether the assets are considered marital or not.
What is an Asset?
An asset is property, which has value, and is owned by a person or business. It’s basically a thing of value that can be turned into cash. This would include jewelry, property, vehicles and electronics. An asset can be marital property or separate property, but it can be difficult to determine that separation without an agreement between the two or a court order during a divorce.
This is property that was purchased before the marriage. If that property was sold and the proceeds purchased other property, that is considered separate property even while married. The increase in value of the property is considered separate too. That is true only if the spouse did not contribute to the value increase.
A gift or inheritance received from a third party would be separate property from the marriage. If the gift was from the spouse’s family, it would still be considered separate property.
Compensation from a personal injury, accident or worker’s compensation would be considered separate. This doesn’t have to be shared with a spouse after the marriage is dissolved.
Marital property includes all valuable items acquired during the marriage regardless of who paid for them. This would include property and vehicles, but also, furniture, artwork and boats. Cash, bank accounts and bonds or securities accrued during the marriage would be joint property.
Property purchased aside from the marital home would be considered marital property unless it was purchased using funds from the sale of a property owned before the marriage.
This is all considered marital property unless there was a prenuptial or postnuptial signed by both parties expressly separating the assets.
Separation of Assets in a Divorce
Assets before and during the marriage will have to be split in a way that the laws allow in the couple’s state. If they can’t agree on the division of property, the court will have to step in and make those determinations based on a few factors.
First, they’ll identify all the assets. That includes every piece of property, cash or belongings of value. It’ll also include identification of the debts.
Next, the court will classify whether the assets are marital or separate. Not all property acquired during the marriage is jointly owned.
The court will put a value on the property based on the market value with taxes taken into account.
Lastly, the court will distribute the assets to the divorced couple.
Items, Belongings and Property After Separation
The items that are purchased or acquired after the separation are not considered marital assets. The important part of the process is marking the date of separation. That can be difficult unless they can prove the date a spouse left the home definitively. This date of separation can be hotly contested in a divorce proceeding if there’s been some real assets acquired.
When the couple split and one spouse left the home with property, that property is still considered marital until they’re divided by the court or the couple agrees on the distribution. For example, a couch taken by the husband is still considered marital property and might revert back to the wife in the divorce decree.
Some states are community property and some are common law states. That will dictate the division of the assets before the marriage, but after the separation, those items are considered separate property as long as you can prove the date of the separation. That proof might include a rental agreement on a new apartment or utility bills in the spouse’s name that mark a new address.